Stock price of Sun Microsystems plunged more than 20 percent on Monday following reports that talks between the Silicon Valley company and International Business Machines (IBM) practically fell apart.
IBM withdrew its acquisition offer Sunday after Sun, balking at the price and terms of the sale, sent a notice terminating its agreement to talk exclusively with IBM, several U.S. newspapers reported, citing people informed about the situation.
Sun's board is split over whether to do the deal, with a group led by chief executive officer Jonathan Schwartz in favor and a faction led by chairman and co-founder Scott McNealy opposing it, The Wall Street Journal reported.
"It's possible the two sides are hardening their positions only to strike a full deal in the near future, but for now the stance is confrontational," the newspaper said.
When words of the acquisition talks surfaced a couple of weeks ago, IBM's bid was reported to be in the range of 10 to 11 U.S. dollars a share, more than double of Sun's stock price before the news broke.
According to media reports, IBM then lowered the price to about9.4 dollars a share after Sun demanded assurances that IBM would proceed with the deal in the face of anticipated extensive scrutiny from antitrust regulators.
The walk away of IBM has left Sun in a tough situation with an uncertain future, the Silicon Valley-based San Jose Mercury News said in a report.
If Sun's share price drops further, the company will have to justify its stance to disappointed stockholders and nervous customers alike amid concern that it is letting its best exit option slip away, the newspaper said.
(Xinhua News Agency April 7, 2009)
